"mid-day repast," 1786, shortened form of luncheon (q.v.). The verb meaning "to take to lunch" (said to be from the noun) also is attested from 1786:
But as late as 1817 the only definition of lunch in Webster's is "a large piece of food." OED says in 1820s the word "was regarded either as a vulgarism, or as a fashionable affectation." Related: Lunched; lunching. Lunch money is attested from 1868; lunch-time (n.) is from 1821; lunch hour is from 1840. Slang phrase out to lunch "insane, stupid, clueless" first recorded 1955, on notion of being "not there." Old English had nonmete "afternoon meal," literally "noon-meat."